Obesity-associated inflammation is recognized as a critical factor in the development of insulin resistance leading to Type 2 diabetes and other metabolic disorders. However, the critical question of whether inhibiting inflammation is a good approach in the attempt to treat insulin resistance remains open. Our long-term goal is to investigate the endogenous regulatory mechanisms geared toward prevention of hyper-activation of inflammatory responses in the adipose tissue and to understand whether blunting inflammation may be partially counterproductive in maintaining insulin sensitivity. The rationale being that while the detrimental effects of pro-inflammatory cytokines are well known, there may be beneficial effects of inflammation that have been generally overlooked. G-protein Pathway Suppressor 2 (GPS2) is a transcriptional cofactor and an inhibitor of ubiquitin signaling playing an important anti-inflammatory role in the adipose tissue. This proposal is designed to: i) take advantage of the aP2-GPS2 mouse model to dissect the opposing effects of inhibiting inflammation in the context of obesity-induced insulin resistance; ii) uncover the molecular mechanism of GPS2 transcriptional actions as a novel coactivator of PPAR?. To address these questions, we propose three Aims: Specific Aim 1 will characterize the metabolic and inflammatory phenotype of the aP2-GPS2 transgenic mice and investigate the hypothesis that GPS2- mediated inhibition of inflammatory responses in adipocytes and macrophages impairs the storage capacity of the adipose tissue and induce ectopic fat deposition. Specific Aim 2 will dissect the molecular mechanism of GPS2-mediated transcriptional regulation of the adipokine gene resistin and broadly assess the relevance of GPS2 as a transcriptional coactivator in adipocytes. Specific Aim 3 will elucidate the structural basis of GPS2-mediated regulation of inflammatory responses via inhibition of specific ubiquitin machineries. Overall, the proposed studies will contribute significantly to the general understanding of the effects of inhibiting inflammatory responses on the regulation of the adipose tissue homeostasis and ectopic fat accumulation, and will define the molecular and structural basis of GPS2 transcriptional actions as a novel coactivator for the nuclear receptor PPAR?.